Good afternoon and welcome to the SP Plus Corporation first quarter 2022 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one on a telephone keypad. To withdraw your questions, you may press star and two. Please also note today's event is being recorded. At this time, I'd like to turn the conference call over to Mr. Kris Roy, Chief Financial Officer. Sir, please go ahead. Thank you, Jamie, and good afternoon, everyone. As Jamie just said, I'm Kris Roy, Chief Financial Officer of SP Plus. Welcome to our conference call following the release of our first quarter 2022 earnings. During the call today, management will make remarks that may be considered forward-looking statements, including statements as to the impact of COVID-19, outlook and expectations for 2022, and statements regarding the company's strategies, plans, intentions, future operations, and expected financial performance. Actual results, performance, and achievements could differ materially from those expressed or implied due to a variety of risks, uncertainties, or other factors, including those described in the company's earnings release issued earlier this afternoon, which is incorporated by reference for purposes of this call and available on the SP Plus website, and risk factors in the company's annual report on Form 10-K and quarterly reports on Form 10-Q and other filings with the SEC. In addition, management will discuss non-GAAP financial information during the call. Management believes the presentation of non-GAAP results provides investors with useful supplemental information concerning the company's ongoing operations and is an appropriate way to evaluate the company's performance. Non-GAAP measures are provided for informational purposes only. A full reconciliation of non-GAAP financial measures to comparable GAAP financial measures were presented in the tables accompanying the earnings release. To the extent other non-GAAP financial measures are discussed on the call, reconciliations to comparable GAAP measures will be posted under the Regulation G tab in the Investor Relations section of the SP Plus website. Please note this call is being broadcast live over the Internet and is being recorded. A replay will be available on the SP Plus website shortly after the end of the call and will be available for 30 days from today. I will now turn the call over to Marc Baumann, our Chairman and Chief Executive Officer. Hey, thank you, Kris, and good afternoon, everybody. I'm very pleased with our execution in the first quarter, building on our market position across key verticals and service offerings amid the continued improvement in business conditions. This strong start to the year, together with our current visibility and business development pipeline, supports our expectation that our profitability for the full year will approach or exceed pre-pandemic levels. We see this as a significant accomplishment, given that certain of our markets, such as office and retail, have only partially recovered from the impact of the pandemic, which we believe provides SP Plus with additional growth opportunities in future periods. The 28% year-over-year increase in first quarter adjusted gross profit benefited from the significant contract wins we achieved over the last year. The operating leverage inherent in our post-pandemic business model drove even greater year-on-year increases in adjusted operating income and adjusted EBITDA of 46% and 45% respectively. We view these metrics as representing an inflection point for SP Plus, demonstrating the competitive advantages of our scale- and industry-leading technology, which are driving improved same-location performance, strong new business activity, and the expansion of the addressable market for our services. Looking at our commercial segment, we experienced same-location gross profit growth in nearly every vertical compared to Q1 of last year as business conditions continued to improve. We were also successful in adding new business that more than offset normal turnover. Our Sphere technology offerings continued to be an important differentiator for SP Plus in winning new contracts, as clients are very receptive to innovative ways to increase the profitability of their locations while also improving the consumer experience through touch-free interactions and prepaid reservations. We continue to grow our commercial segment location count, adding 70 locations on a net basis over the last 12 months. We had a very active quarter of new business, including our new contract with the city of Rochester, Minnesota, where we were selected for our ability to bring technology-based solutions to the city's parking operations, which covers over 4,300 parking spaces at 11 locations and also includes on-street meter collection and special event management services. In addition, we're very pleased to have renewed our contract with the National Football League to continue to provide parking, transportation, and mobility services for future events extending through 2027, including the Super Bowl, NFL Draft, NFL Kickoff, and NFL Pro Bowl events. SP Plus has provided parking and transportation services to the NFL since 1999 through its SP+ Gameday division, which manages events and large venue operations alongside local teams and partners. We're excited that sporting, entertainment, and social events are largely back from the pandemic. Turning to the aviation segment, we saw strong year-on-year growth thanks to the new contracts SP Plus has been awarded over the last two years, and its services are reopening at airports now that domestic travel is on the upswing. This is another area where our Sphere technology offerings continue to drive growing interest from clients, as it allows airports to collect additional revenue without significant infrastructure and operational costs. In the first quarter, SP Plus renewed its contract with Salt Lake City Airport, where we provide a full suite of mobility services, including parking management, shuttles for employees and the public, ground transportation management, and hardstand shuttling to and from the aircraft when gates are not available. We're also seeing continued interest in our Curbside Concierge offering, where we recently checked in our one-millionth bag under this program. We expect a second large airline to begin a pilot program shortly, and we're engaged in conversation with a number of other potential airline partners. The appeal of this service is that it helps airports and airlines improve the overall traveler experience while reducing congestion, and the cost is borne by the passenger. This morning, we issued a press release that announced our strategic partnership with System Property. As part of the agreement, we took over operations at 25 parking properties previously managed by the Motor Parks division of System Property. SP Plus will also be the provider of choice for mobility solutions to System Property as it actively expands its real estate portfolio. We see this as an excellent growth opportunity and look forward to deploying our Sphere technology platform to optimize the consumer experience at System Property's owned and managed properties. As you can see, the first quarter was both successful from an execution standpoint and busy from a business development perspective for SP Plus. 2022 is off to a strong start, and I'm pleased to report that positive business trends have continued as we've moved into the second quarter. Now I'll turn the call over to Kris for a financial review. Kris? Thank you, Marc. As Marc discussed, we had a strong start to 2022 that lays the foundation for the remainder of the year. As always, I will provide additional color around our adjusted results for the first quarter of 2022 that underscores our confidence in our full- year guidance. In the first quarter, adjusted gross profit, which excludes depreciation, amortization, and restructuring and other costs, increased 28% year-over-year to $51.4 million, as we are seeing the benefit of contract wins in the past 12 months and also an improving business environment that Marc spoke about earlier. Just a reminder that the year-ago number included a $4.8 million benefit related to certain cost concessions which did not reoccur. With that in mind, the year-over-year growth was even more impressive. First quarter 2022 adjusted G&A expense, which includes restructuring and other costs, amounted to $24.4 million. While this was a 20% year-over-year increase, it is related to our continued investment in the business to support future growth and includes higher overall compensation costs, including performance-based compensation. I am pleased to say that adjusted G&A in the first quarter of 2022 was still approximately 7% below the comparable period of 2019 due to a more streamlined cost structure that allows us to operate as a leaner organization and better leverage our gross profit. Excluding amortization of acquired intangible assets, restructuring, and other costs, first quarter 2022 adjusted earnings per share were $0.60, which is more than double last year's adjusted earnings per share of $0.27 on a comparable basis. As we move to our cash flow, first of all, I am pleased to say that we received the $20 million federal tax refund we spoke about on our last call. As a result, first quarter cash flow from operations was $26.4 million, and free cash flow totaled $23.8 million. Even without the tax refund, both metrics were substantially above last year's first quarter levels, where both cash from operations and free cash flow were negative. This quarter's performance was also impressive given our historic trends, where the March quarter is often negative. As for the balance sheet, we recently amended and upsized our senior credit facility to $600 million while removing a number of constraints and providing increased flexibility to pursue growth opportunities and to focus more broadly on capital allocation priorities. We are pleased with the support we received from our long-standing lender group. Based on our current results and visibility, we are pleased to affirm our full- year 2022 guidance. Adjusted gross profit is expected to range from $200 million-$220 million, which at the midpoint represents year-on-year growth of 13% over 2021. We expect adjusted EBITDA to range from $110 million-$120 million, which at the midpoint represents 21% year-over-year growth. Our outlook for free cash flow is between $70 million and $80 million, which is a 79% increase at the midpoint compared to the 2021 full year number. With that, I'll turn the call back over to Marc. Hey, thank you, Kris. As you heard from Kris, SP Plus now has a strengthened financial position together with increased borrowing capability. As business conditions continue to improve, we're in a position to consider additional growth avenues and value creation. This could include organic investment with strong ROIs and potential acquisitions that would expand our addressable market, as well as the deployment of capital allocation strategies that create additional value for shareholders. In summary, SP Plus is rebounding from the pandemic as a stronger company and an even more formidable competitor. Our commitment to delivering the highest levels of service has kept our retention rates high and our new business pipeline robust. We look forward to continued growth as we move through 2022. Jamie, we're now ready for questions. Ladies and gentlemen, we'll now begin the question-and-answer session. To ask a question, you may press star and then one using your telephone keypad. If you are using a speakerphone, we do ask that you please pick up your handset before pressing the keys to ensure the best sound quality. To withdraw your questions, you may press star and two. Once again, that is star and then one to join the question queue. We'll pause momentarily to assemble the roster. Our first question today comes from Daniel Moore from CJS Securities. Please go ahead with your question. Thank you. Good afternoon, Marc. Good afternoon, Kris. Thanks for the color and taking the questions. Sorry about that. Let's start with bags, or the old, you know, the bags business. Travel rebounding sharply, cruise lines starting to book up again. Talk about the level of conversations and what that's been like with your customer base, you know, over the last, say, four-eight weeks. Are you seeing accelerated interest in turning the service back on? Just kind of any color as to the tenor of those conversations. That's a great question, Dan, and I think we're reading a lot about particularly domestic travel and the constraint on domestic travel is really airline capacity rather than consumer demand. I've made some trips myself recently and been amazed at the amount of congestion that you see in airports. Because of that congestion, the airline clients that we serve and our airport clients that we serve are both very, very concerned about alleviating that congestion. I think for us the conversations have accelerated. Our proprietary remote check-in capability, which we can offer as a sponsored model that's paid for by an airport, an airline, or a cruise line, is available and operating. We've also, as we indicated in our prepared remarks, have expanded what we're calling Curbside Concierge, which is a traveler pay model. We're now, as we said, processed over 1 million bags with one airline just over the past year, and are now getting a lot of interest from other airlines because they're seeing what's happening with their passengers trying to get through the terminals. Very helpful. Maybe shift to System Property agreements. Can you provide a little bit more detail, you know, that strategic partnership, how does that differ from a typical management contract? You know, is that a template for other opportunities going forward? Yeah. Well, I mean, at one level, we're gonna be taking over operations that they were formerly handling themselves. I think most businesses are starting to look at their core strengths, and that's a perfect example of one of those situations. They are real estate experts, they are property owners and managers, and they did some managing of parking. They also had some third parties providing parking management services. As they look at the requirements to be successful as an operator, which is primarily around technology, they really noticed our Sphere platform and said, "You know, we aren't gonna be able to duplicate that ourselves. We're not prepared to make the investments that you've made to create that kind of an offering." They came to us and said, you know, "Look, is there a way for you to take over these operations, bring your cutting-edge technology? But more importantly, as we focus our business on looking at additional real estate, acquisitions and growth, we'd like you to be our partner of choice as we go forward." Because they recognize very well that a partner who can optimize the revenue and the customer experience in parking operations is gonna create value for that real estate. I think that's really what's behind that particular arrangement. I think what's exciting for us is that I do see it as a template for other situations, because there's lots and lots of people out there that for many years have both owned real estate and operated parking management services. I think they're going to increasingly see that their core strength is in real estate and that our core strength is in bringing technology to parking management operations, and that by working with us, they have an opportunity to drive their bottom lines and drive their growth. Very helpful. Last for me is just how would you describe Q1 results relative to your internal expectations? Clearly outpaced some of the street's estimates, including ours. Just wondering how we're pacing relative to your initial expectations embedded, you know, when you gave your original guidance a couple of months ago. Dan, this is Kris. I'd say it was, you know, certainly a strong quarter for us, probably a little stronger than we originally expected, kind of coming into the year. I think the recovery, as Marc mentioned, kind of just passenger volumes that you're seeing and people movement certainly happened, probably a little earlier than we thought. Certainly, spring break typically kicks that off. I think as we saw spring break kind of get into full swing, I just think we saw a lot of people movement and a lot of activity out there. It's really encouraging first quarter. All right. I'll jump back with any follow-ups. Thank you. Thanks, Dan. Our next question comes from Kevin Steinke from Barrington Research. Please go ahead with your question. Hey, good afternoon. You know, the question was asked about bags and the trends there, and I think you mentioned some of your aviation clients starting to bring some of the services back to you or outsourcing those services again to you that maybe they had been sourced for a while in the pandemic. I mean, can you just talk about the trend there, how much room there is to, you know, recapture or restart some of those services for your aviation clients that were temporarily put on hold? Sure. I think if you go back to the Q4 call, you know, I talked about the aviation recovery being something that we didn't expect to be fully realized until 2023, 2024. That's really on the back of, you know, decision-making that aviation clients make to bring back our services. I think what's happened since we made those statements is that the demand for the services has accelerated. There's definitely more travel than I think anybody expected, and the issue that's gonna, I think, is looming, and we're hearing it in what the airlines are saying, is that they don't have the capacity to meet the demand. Therefore, they're gonna be controlling their capacity, especially for the rest of this year, as they look to bring on pilots and other staff that they need to train and get ready to operate their businesses. I don't think airline capacity in 2022 overall is gonna be above pre-pandemic levels, and that means that our level of services to them aren't gonna be above pre-pandemic levels either. I think the good news is that we're now in a, let's call it, a more cost-conscious world than we were pre-pandemic in aviation. Whether it's airports, whether it's airlines or other potential clients in cruise lines and resorts, they're all saying, "How can I deliver a really strong consumer experience? How can I alleviate friction and have a low touch, you know, experience for people and not endure a lot of cost?" I think the fact that we were able to test out our Curbside Concierge product, you know, during the pandemic and see that there's consumer acceptance for paying out- of- pocket for convenience and alleviation of friction, has really encouraged a lot of our airport and airline clients to see that as a model going forward. I can't emphasize enough, you know, the great success we've had with one airline. You know, we've done a lot of research around how the consumer's reacting to paying for these services, and they're fine with it because they're getting something that they can value. I think other airlines are seeing that now. Definitely airports and airlines are both seeing the alleviation of congestion is almost their top priority right now. Right. Yeah, great. That's helpful. Any just maybe an update on, you know, the pace of transaction volumes or traction of volumes that you're seeing on, you know, through the Parking.com app and, you know, your ability to generate transactional fees through that. You know, just start with that. That sounds fine. You know, we were just talking about that before the call started, and Kris and I didn't bring the exact data with us to the call. I think we can say that we continue to set new records, you know, on an ongoing basis. You know, it's growing rapidly. We're pushing the penetration of the gateless solution out, you know, through every location. I know we have more than 600 gateless locations running our gateless solution, and adding more all the time. Our gated solution, which was a little bit more technically complex and didn't start at the same time, is now out there, and I think we've got certainly more than 100 locations on that platform. The transaction volumes are growing rapidly. I was just talking to one of our executives today about his markets, and he was just saying to me, in Chicago, we've gone from, you know, like 2% transactions going through Parking.com to 11% in Chicago in just the last eight months. You know, there's definite and there's opportunity for that number to go even higher. I think as a company, where for a long time we were seeing our digital transaction volumes kind of hovering in that sort of 5%, we've got markets and we've got client locations now where we're up at 30%, 40% of transactions are going through our Parking.com mobile app. I think there's a long, long way to go of continued growth in that space. Right. Great. You mentioned, you know, your financial flexibility or your ability to invest in the business going forward. You know, obviously, organic sounds like it's still a priority. You also mentioned potential acquisitions. Can you just give us some updated thoughts on what might be of interest, you know, on the acquisition front? Sure. I mean, I think, you know, we're clearly making sure that our business has all the capital that it needs to grow organically as fast as possible. The bar that we have set internally is that if our clients value it in the technology space, we can provide that solution. We are full foot on the gas pedal as we've been through the pandemic to accelerate our technology development and to roll out new technology capabilities. If we can partner with somebody or even potentially acquire somebody that can help us accelerate our technological transformation, that's something that we're gonna be looking at and we are looking at. I think also now that businesses have stabilized and for the most part have a little bit of a more predictable and visible financial performance, we can turn our attention back to some of the areas that we have historically looked at, whether it's you know smaller regional parking companies. We provide a lot of ancillary services around shuttle bus operations and the like that have grown nicely organically. We'll just cast our view out there and look at the businesses that are out there in the space and always asking ourselves the same question: Can an acquisition help us bring something of value to a client base that we understand well and can help us accelerate our growth as a company on a sustained basis? We're not interested in just being a larger version of ourselves. We're interested in being a more rapidly growing version of ourselves. As you see, as we grow, we throw off significant amounts of free cash flow, and we're gonna wanna use some of that to further accelerate the growth of the business. Okay. Thank you for all the commentary, and congratulations on the first quarter results. Great. Thank you, Kevin. Thanks, Kevin. Once again, if you would like to ask a question, please press star and then one to join the question queue. To withdraw your questions, you may press star and two. Our next question comes from Marc Riddick from Sidoti & Company. Please go ahead with your question. Hi, good afternoon. Hey, good afternoon. Hi, Marc. I was wondering a few things and maybe we could start with sort of the competitive landscape. Certainly quite a bit of the success as far as gaining new accounts and new orders, as well as the announcement made today have been things that have been set in place for quite some time. I was wondering if you could talk a little bit about, certainly you've talked about the benefits of technology and leading to new order flow, but I was wondering if you could talk a little bit about maybe the overall competitive dynamic, maybe what you're seeing there, and if there are sort of other things that you would point to that might lead to some of the market share gains that you've seen. Sure. Well, I think, you know, when you look at the competitive landscape, you have two types of companies out there, and one are people that have historically been parking operators, such as ourselves, and are either are or are not in the process of transforming themselves into technology-driven businesses. Some of our legacy competitors in that space, there are some that have done very little with technology, and we're getting a lot of receptivity from their clients around bringing our Sphere technology platform to those clients because they just haven't, quote-unquote, kept up. We have some other large legacy competitors who are focusing on things away from parking and maybe are, whether it's last mile delivery or other things of that nature, those are alternatives to focus on. Some of their clients are saying to us, you know, are they really interested in optimizing the performance of a facility any longer? Then you turn your attention over to some pure technology competitors that are out there, and many of them have a one-size-fits-all mindset. They've developed a technology solution, whatever it might be, and they go around trying to convince people that that one solution meets the client's needs. There are some clients where that'll be a solution that does meet their needs. The type of clients that we are going after generally have complex requirements, and they are looking for a combination of a technology solution that is customized and oriented toward what they need, but also very strong fundamental operating expertise. It's not just about buying a tech platform and putting it in place. You know, you need people who have expertise in using that tech platform to get optimal results. I think as we look to the future, we see ourselves as being the leading player in trying to meet client needs, providing a combination of both cutting-edge technology, but at the same time, the proverbial boots on the ground and the management expertise to manage that technology to get results that a client's looking for. Over and over again, when we announce new wins, you know, the clients are telling us over and over, that's what they're looking for, your technology and digital solutions, but also your extensive operating expertise in using those solutions to drive the results that we're looking for. Great. Then switching gears to sort of a bigger picture sort of question on, you talked about the flow of people, flow of traffic, conversations around travel. I wonder if you could talk a little bit about maybe what you're seeing as far as the level of folks returning to the office. I think on the last call maybe it was on the last call that you talked about some of the profitability matrix of those who are engaged in a hybrid approach as opposed to the traditional, you know, working in the office every day, and maybe just sort of touch on the progress that you've seen so far this year and how that's looking. Yeah. Well, I think the trends are continuing on the return to office. I know there was a little setback with in some cities and in some places with the variants that were running around earlier in the year. You know, most places, I think, have not continued to push back their resume in the office dates. You know, we obviously have continued all of our offices operating throughout the pandemic because we have thousands of employees out there delivering services every day. You know, most companies are looking at a hybrid model two days a week, three days a week. I think that's what people that work in offices are looking for as well, you know, to be those are the kind of jobs that people wanna have now. If you were to say everybody's gotta be in five days, some of their workforce is gonna be looking for other alternatives. I think we've kinda settled in, you know, in our economy with people wanting that and companies feeling comfortable that a hybrid model works. What does that mean for us? You know, ultimately, our contract base is predominantly management contracts. We've talked about this numerous times, and that contract base means that we are trying to deliver solutions for our clients. Those solutions involve optimizing the profitability for the client. They involve bringing technology to drive costs out to make the client's operation super efficient. It makes the facility, we wanna make the facilities appealing to the traveling public because they don't have a lot of friction, and they can employ touchless or no-touch solutions with the Parking.com mobile app. All of these are the things that we are bringing in exchange for being paid a management fee. Our profitability is not directly tied, in many, many cases, to the actual utilization of the facilities. While it would be great to see more people back in the office, you know, to a certain extent, our business model is around providing solutions for clients. One thing I have pointed out before, monthly parking is discounted parking. If somebody's coming in three days a week, they might be paying as much for parking as they, as in revenue terms as somebody would have paid for monthly parking. You know, the revenue shortfall, even for the clients, isn't as great as you might think if the hybrid model is sort of the permanent way of business. That's very helpful. Thank you. Then I guess the last one for me for now is I was sort of wondering if you could sort of talk a bit about future growth opportunities as far as are you beginning to see or think about some of the opportunities to expand into other markets or you know potential for you know attractive acquisitions in the future? If so, sort of how that might sort of play into the new business model and sort of how that could move forward together? Thanks. Sure. Well, one of the things that we are looking at is how do we grow the market? You know, we obviously try to take things away from competitors. We've talked about that, and we've talked about our new provider of choice arrangement with System Property. But one of the things we found is that our technology solutions can be brought to clients where there's no need for a traditional operation. We're increasingly adding clients where we aren't necessarily providing boots on the ground. If the situation requires boots on the ground, we're gonna provide it. But there are definitely situations, and many of these are situations where the client had not been charging for parking or had not been collecting revenue very efficiently in the past. We definitely see that as a way for us to expand our addressable market with the technology platform that we're developing now. I think beyond that, we're in most of the major geographies in North America, and so we're clearly trying to expand our market share, take business from competitors, get clients to outsource. We definitely see some of the traditional municipal and institutional spaces as places where we can grow and get people to realize that if you do something internally, you're not gonna have the tech platform ready to go with the expertise to use it that somebody like SP Plus has. I think that's another opportunity for us to continue our organic growth as well. Excellent. Thank you, Marc. Thank you. Our next question comes from Tim Mulrooney from William Blair. Please go ahead with your question. Marc, Kris, good afternoon. Hi, Tim. Hi, Tim. On that System Property development deal, how much of their real estate portfolio do those 25 parking locations represent? Is that their entire portfolio? I'm just curious on the, you know, the runway here that could be captured through additional properties. Yeah. No, it's only about nine properties of theirs, and the rest were other people that they were providing parking management services. At some level, they were a small competitor of ours in primarily in Southern California. They do have a number of other properties and hope to continue to grow their business as well. Some of those properties are operated by third parties, not by them. In fact, none of them are operated by them. They're all operated by third parties. If there is parking, and many of those are on leases that will burn off. I think the attraction of working with them is that as those leases come up, it's gonna give us an opportunity to further our relationship with them as well as moving forward with them as they look at new properties. One of the things we try to do for our property ownership and property management clients is help them evaluate what the financial opportunity is from the parking operation, especially if you bring in new technology like the Sphere platform. You know, we expect to be working with them to try to help them identify the financial opportunity for them of acquiring new properties. Okay. That's very clear. Thanks. Switching gears to pricing. I wanted to ask about pricing, not the contracts themselves, but the actual cost of pricing to the consumer. You know, cost across your portfolio. Is the price of parking, the price of parking tickets, is that going up right now in line with just about everything else that we see? I'm curious how much pricing on the parking might contribute to your lease location economics this year. Yeah. Well, one thing we do, and we've done this for a long time, is we're constantly aware of what the competitive parking pricing environment is around any facility we operate. Clearly, if it's a management client, we're recommending to our management clients what rates they should charge. For our leases, we make those decisions ourselves. One of the tools that we deployed during the pandemic is a web scraping tool, as part of our tech platform, so that instead of having to walk around and do rate surveys, but with a clipboard, we can actually get that information, put it with our pricing experts, and they can be making recommendations to our operating teams around changes to pricing. That's an ongoing thing that we've been doing really for the last 18 months, to try to ensure that we don't miss opportunities to move pricing with the market. I would say one of the things that's happened is that the transient demand, you know, particularly in markets like New York, is so strong that we're reducing the allocation of parking to monthly parkers. You have this strong transient demand. The monthly parkers are discounted parking, so we're allocating less of the parking facility to monthly parkers. One of the ways that we do that is we put up the prices sharply for monthly parking, and we're motivating those people to pay to the market or to find an alternative for their monthly parking. There's definitely an opportunity here during this time. It's not driven by inflation as much as it's simply driven by supply and demand. We're seeing more and more demand, and as that occurs, we're gonna continue to put up prices. Okay. You wouldn't characterize the cost of pricing as increasing significantly this year relative to prior years, like we're seeing across a lot of different businesses? Probably not necessarily in 2022, you know. You know, bear in mind, you know, if it's a lease location, Tim, you know, we do have to pay wages and benefits, and we have other input costs too. Our team is gonna be very keenly focused on ensuring that we're not seeing a loss of profitability at those lease locations as we maybe incur some higher labor costs or higher other input costs. We're very, very focused on that. What I would say is that in the earlier stages of the recovery, meaning last year, you know, there were situations where we were like doubling monthly parking rates, you know? I mean, so, you know, that I think we're through that period now. I think, you know, we are in an inflationary environment. We are in a period where consumers are expecting prices to go up. Once again, you know, people have fixed amounts of money they wanna spend for various services, and they're gonna be shopping competitively. We have to ensure that the rates we charge are competitive to the local marketplace that we're competing with for parking people. Got it. Okay, thanks. Last one from me. You know, I think hospitality is one of the areas that got hardest hit by the pandemic for you guys, and I don't know that you've ever disclosed what percent of your commercial revenue comes from hospitality and your valet business, but you know, can you help us understand where that business is at relative to pre-pandemic levels? Like for example, if it was 10% of your business in 2019, is it back to 6%-7% today? Is it still significantly depressed relative to 2019? Which also isn't necessarily a bad thing. I mean, it represents an opportunity. Just trying to understand where that business is today. Right. Well, our commercial division is over 3,000 locations, as we've talked. You know, probably pre-pandemic, you know, hospitality locations represented maybe 10%. I don't have the revenue and gross profit numbers here, but, you know, it's roughly 10%, so it's a significant and important part of our commercial business. Clearly, we had some hotels close or eliminate services during the pandemic, so those numbers probably went down a bit. But what I would say now, and that's the important thing for us, is that the most significant part of our growth opportunity going forward with our traditional services is really in hospitality. You know, we added, you know, 12 locations, you know, just in the quarter, 12 hotels. We've got more in the pipeline. You might say, "Well, why would that be?" It's because, you know, from a competitive point of view, you know, we have a skill set. We have more four- and five- diamond resorts than anybody else. We have expertise handling the most demanding clients for people like Four Seasons and Ritz-Carlton. I think as hotels are seeking to restart and bring their businesses back to the pre-pandemic levels, they recognize that the first impression and the last impression at that property is what drives customer or guest satisfaction and likelihood to come back. We're seeing a tremendous amount of interest from hotels who are saying, you know, "I'd outsourced this before to somebody else, and they're not doing a good enough job. They're not focused on the KPIs that we're focused on. If we look at sort of our competitors for operating hospitality, they're stumbling a little bit. We definitely see that as a real growth opportunity for us. That's great color. Thank you. You're welcome. Ladies and gentlemen, we do have an additional question. This comes from Marc Riddick from Sidoti & Company. Please go ahead with your question. Hi again. I just wanted to follow up with something I forgot to ask about. I was wondering if you'd touch a little bit on the progress on both gateless locations, kind of where we finished the year and how we started the year there, and where you think that could go. As well as what we're looking like for overall retention rates. And I'll just start with those two. Thanks. Yeah, I think you may have turned your attention away, Marc, for a second, but I did comment on the gated and gateless. You know, we're you know continuing to drive the penetration of both those solutions. The gateless solution is now, you know, probably approaching 700 locations, and we'll continue to drive that. The gated solution certainly over 100 now with more in the pipeline. You know, I think we continue to see that as a way to drive transaction volumes through our Parking.com mobile app. I think that'll be a continued source of upward growth for us during the rest of this year, and I'm sure into next year. In terms of retention, our commercial division location retention rate was 92% in the quarter, which is a strong, you know, retention rate. We're glad to see it. You know, it's up slightly from where [crosstalk] From where we ran, you know, most of last year. I mean, Q1 of last year was 87%. We're pleased to see that ticking up as we focus hard on ensuring that we understand what clients are looking for and making sure that they're pleased and delighted with what we're delivering. Sounds very good. Thank you, Marc. You're welcome. Ladies and gentlemen, with that, we'll be concluding today's question and answer session. I'd like to turn the floor back over to Marc Baumann for any closing remarks. Hey, thanks, Jamie. I just wanted to thank all of you for joining us today. We're obviously very excited about our strong start to the year and very much looking forward to speaking with you next quarter. Take care and be well. Ladies and gentlemen, with that, we will conclude today's conference call. We do thank you for attending today's presentation. You may now disconnect your lines.